{"id":16846,"date":"2016-01-24T17:40:55","date_gmt":"2016-01-24T22:40:55","guid":{"rendered":"http:\/\/olduvai.ca\/?p=16846"},"modified":"2016-01-24T17:40:55","modified_gmt":"2016-01-24T22:40:55","slug":"the-end-is-nigh-for-the-feds-bubble-epoch","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=16846","title":{"rendered":"The End Is Nigh for the Fed\u2019s \u201cBubble Epoch\u201d"},"content":{"rendered":"
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The End Is Nigh for the Fed\u2019s \u201cBubble Epoch\u201d\u00a0<\/a><\/h3>\n<\/div>\n
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Market Mythology<\/strong><\/div>\n

LONDON \u2013 Twice in the last 15 years, markets have tried to correct the mistakes and excesses of the Bubble Epoch. Each time, the Fed came back with even more mistakes and excesses. Trillions in new credit\u2026 lower lending rates\u2026 easier terms\u2026 ZIRP\u2026 QE\u2026 and the Twist!<\/p>\n

\"MW-BX052_FOMC_m_MG_20140319160153\"The gaggle of price-fixers the job of which is to regularly falsify one of the most important price signals in the economy. The idea that the economy can be \u201cimproved\u201d by the interventions of a handful of people who have zero practical economic experience and rely on extremely dubious theories to guide their decisions is downright bizarre. Who can possibly believe that this works? It is a huge farce \u2013 one that is very dangerous for prosperity and economic progress.<\/p>\n

Photo credit: Bloomberg<\/p>\n

Over the short run, markets respond to myths. Investors are ready to believe almost anything\u2026 for a while. But over the long run, there is death and destruction \u2013 a reality outside of what we believe.<\/p>\n

No matter how badly investors want asset prices to go up, for example, asset prices don\u2019t always comply. On Wednesday, the Dow sank 560 points in the first few hours of trading. It then recovered half of those losses to end the day down 249 points \u2013 for a 1.5% fall.<\/p>\n

U.S. crude oil plunged below $27 a barrel \u2013 the lowest level\u00a0in 13 years. The financial media don\u2019t know what to do. Typically, they downplay a bear market as long as they can\u2026 explaining the many reasons why the sell-off is \u201coverdone\u201d and why the \u201cbottom\u201d has already been found.<\/p>\n

The\u00a0Wall Street Journal<\/em>, for example, tells us that the \u201cmarket\u2019s panic is incongruent\u201d with economic reality. Yahoo! Finance already sees \u201csigns of capitulation.\u201d It offers advice on \u201chow to trade a bear market,\u201d too.<\/p>\n

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…click on the above link to read the rest of the article…<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

The End Is Nigh for the Fed\u2019s \u201cBubble Epoch\u201d\u00a0 Market Mythology LONDON \u2013 Twice in the last 15 years, markets have tried to correct the mistakes and excesses of the Bubble Epoch. Each time, the Fed came back with even more mistakes and excesses. Trillions in new credit\u2026 lower lending rates\u2026 easier terms\u2026 ZIRP\u2026 QE\u2026 […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[5728,6190,1799,184,431,534,592,661,662,11915,861,1939],"class_list":["post-16846","post","type-post","status-publish","format-standard","hentry","category-economics","tag-acting-man","tag-bill-bonner","tag-bubbles","tag-crude-oil","tag-interest-rates","tag-monetary-policy","tag-oil-price","tag-qe","tag-quantitative-easing","tag-twist","tag-wall-street-journal","tag-zirp"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/16846","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=16846"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/16846\/revisions"}],"predecessor-version":[{"id":16847,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/16846\/revisions\/16847"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=16846"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=16846"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=16846"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}